Bloomberg News

NCAA $60 Million Video-Game Accord Gets Preliminary OK

July 25, 2014

EA Sports NCAA Football titles

Electronic Arts Inc. Sports NCAA Football 13 video games at a store in West Hollywood, California. Photographer: Patrick T. Fallon/Bloomberg

The National Collegiate Athletic Association and Electronic Arts Inc. (EA:US) won a judge’s preliminary approval of $60 million in settlements of athletes’ claims that their images were used in video games without permission.

The decision may mean that the judge will soon rule on whether the NCAA must change its rules to let students negotiate licenses for the use of their names and images in connection with $800 million in annual broadcast revenue from college games.

U.S. District Judge Claudia Wilken in Oakland, California, said yesterday that she would provisionally approve a $40 million settlement with Redwood City, California-based Electronic Arts and a $20 million settlement with the Indianapolis-based NCAA, the main governing body for U.S. college sports.

Challenging the NCAA

It’s the first time the association has agreed to a settlement that pays college athletes for acts related to their participation in school sports, lawyers for the players said at the time the NCAA accord was announced.

Wilken held a four-week trial in June over claims that the NCAA violates antitrust laws by preventing players from sharing in profits generated by televised college football and basketball games. That case was brought by Edward O’Bannon, who played basketball for the University of California at Los Angeles and was the Most Outstanding Player of the 1995 Final Four.

Video Claims

The video-game claims came in a class action filed by former Arizona State University quarterback Sam Keller against EA and the NCAA. EA settled last year, while the NCAA settlement was announced the first day of the June trial.

Wilken hasn’t ruled on the other claims.

The outcome of that case could lead to the NCAA and its members being forced to negotiate payments with players for appearances in broadcast games or to allow players to negotiate with broadcasters. Under current NCAA rules, athletes can be stripped of their scholarships and barred from playing if they accept payments.

The NCAA is facing challenges in court and before the National Labor Relations Board from current and former college athletes seeking compensation, better medical benefits, control over their images and labor protections in a system that considers them amateurs.

The cases are O’Bannon v. NCAA, 09-03329, and Keller v. NCAA, 09-01967, U.S. District Court, Northern District of California (Oakland)

To contact the reporter on this story: Karen Gullo in federal court in San Francisco at kgullo@bloomberg.net

To contact the editors responsible for this story: Michael Hytha at mhytha@bloomberg.net Fred Strasser, Andrew Dunn


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